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Digital
Marketing
Fundamentals
From Strategy to ROI
Marjolein Visser,
Berend Sikkenga & Mike Berry
2nd edition
Digital Marketing
Fundamentals
Marjolein Visser RM
Berend Sikkenga SMP
Mike Berry
Second edition
Noordhoff Groningen / Utrecht
Cover design: G2K Creative Agency (Groningen-Amsterdam)
Cover illustration: Getty Images
Any comments concerning this or other publications should be addressed to Noordhoff
Uitgevers bv, Afdeling Hoger onderwijs, Antwoordnummer 13, 9700 VB Groningen or
via the contact form at www.mijnnoordhoff.nl.
The information contained in this publication is for general information purposes
only. No rights or liability of the author(s), editor or publisher can be derived from this
information.
0 / 21
© 2021 Noordhoff Uitgevers bv, Groningen/Utrecht, The Netherlands
This publication is protected by copyright. If you wish to (re)use the information in this
publication, you must obtain prior written permission from Noordhoff Uitgevers bv.
More information about collective rights management for Dutch educational institutions can be found at www.onderwijsenauteursrecht.nl.
ISBN (ebook) 978-90-01-74985-9
ISBN 978-90-01-74984-2
NUR 802
© Noordhoff Uitgevers bv
Preface
Welcome to this, the Second Edition of Digital Marketing Fundamentals. It is
three years since the first edition of Digital Marketing Fundamentals was
published, and nine years since the original Dutch version of this book was
launched.
Marjolein and I have been gratified to learn that the books have found a
permanent place in the curricula of providers of accredited marketing
courses and in the business education programmes of universities across
the world. Universities and business schools in Australia, New Zealand,
Asia, Scandinavia, the Netherlands, the US and the UK have adopted the
book which won the PIM Marketing Literature Prize for The Best Marketing
Study Book.
Sadly, just after we started working on this edition, we received the news
that Berend Sikkenga, co-initiator and co-author of this book, had died
unexpectedly. We dedicate this edition to him. Berend was an inspirational
Digital Marketer and Digital Marketing Fundamentals would not exist
without him.
Naturally, we also wish to thank to our publisher Bert Deen for his enormous
dedication, and patient encouragement. We thank our colleague Tony
Williams – who is not only an accurate and tireless translator, but fluent in
Dutch, English and Digital Marketing. We also thank our families including
Jane and Douwe for their support and understanding while we wrote this
book.
Contributions from over twenty Digital Marketing specialists (see ‘About the
authors’) ensure that contemporary best practice is firmly embedded in the
approach and techniques in this book. We are grateful for their involvement.
In addition, we thank all Digital Marketing professionals and organisations
who have provided us with current examples and cases.
Digital Marketing continues to evolve and the pace of change is
increasing. For this edition the book has been completely revised and
many new examples and cases added. We feature emerging technologies
such as Artificial Intelligence (AI) and Natural Language Processing (NLP)
and the opportunities they increasingly offer to marketers. We focus on
the need to quantify objectives and to measure systematically the return
on investment in Digital Marketing activities. Recent research outcomes,
techniques, sources and examples have been incorporated throughout the
book. Two essential models are introduced in Chapter 1 and run through
the whole book: the Digital Marketing funnel and the RAIA model for Digital
Marketing communication.
© Noordhoff Uitgevers bv
We very much appreciate the fact that the first adopters of this book have
provided several suggestions for improvement. It is wonderful that an
increasing number of teachers and students from across the world are
sending us tips and ideas. We value your contributions!
We hope to meet all readers soon in the groups for this Book:
r digitalmarketing.noordhoff.nl: the official website, including test
questions, trainer concepts and Teaching PowerPoints
r LinkedIn Lecturers Digital Marketing Fundamentals (linkedin.com/
groups/13568788/): for tips, current events, research results and
discussion
r Digital Marketing Fundamentals on Facebook (www.facebook.com/
groups/digital.marketing.fundamentals.book): eg. new insights and
information exchange
For educators there is a special Dropbox folder available with additional
study materials. Ask for access by sending a mail to info@market-wise.nl.
Meanwhile: feel free to connect with us on LinkedIn:
https://www.linkedin.com/in/mikeberrylinkedin
https://www.linkedin.com/in/marjoleinvisser
See you online!
Mike Berry and Marjolein Visser RM
© Noordhoff Uitgevers bv
Overview of the most important changes from
the First Edition
These adjustments make it difficult to use the 1st and 2nd editions side by
side.
Chapter 1 Digital Marketing:
r introduction of the Digital Marketing funnel and the RAIA model have
been added
r theory, examples, questions and case have been updated
Chapter 2 Strategy and Business Models:
r theory, examples, questions and case have been updated
Chapter 3 Market Sensing:
r the order of the sections has been changed
r 3.1 and 3.2 on online consumer behaviour have been significantly
adjusted based on recent research
r 3.4 on the use of social media has been supplemented and updated
r concepts such as biohacking, immersive experiences and connected
home have been added
r remaining sections have been updated
r questions have been updated
r new case study
Chapter 4 Product Realisation:
r structure has been changed
r theory, examples, questions and case study have been updated
r concepts such as contextual interaction, crowd management, Customer
Effort Score, journey innovation, proactive personalisation, product owner,
Minimal Viable Product, relationalisation, scrum, user stories and
Willingness to Pay have been added
r new case study
Chapter 5 Customer acquisition: digital brand communications:
r adapted to the use of the RAIA model
r theory, examples, questions and case have been updated
r mobile communication from Chapter 6 has been moved to this chapter
r more attention has been given to influencer marketing
r concepts such as attention signals, celebrity influencers, newsjacking,
interest signals, micro influencers, native apps, personal relevance,
social media influencers and web apps have been included
Chapter 6 Customer acquisition: recruiting visitors through owned or earned
channels:
r adapted to the use of the RAIA model
r theory and examples have been updated
r a section about marketing automation has been added
r concepts such as lead nurturing, lead scoring and Search Engine Results
Page have been added
r questions have been supplemented and updated
© Noordhoff Uitgevers bv
Chapter 7 Customer acquisition: recruiting visitors through paid channels:
r adapted to the use of the RAIA model
r theory and examples have been updated
r concepts such as ad extensions, bumper, effective cost per click,
embedded formats, feature phone banner, first and second price model,
mid- and post roll, mobile phone interstitial, open auction, preferred deal,
private auction, programmatic direct, search intent, smart bidding,
smartphone banner and negative keyword have been added
r questions and case study have been supplemented and updated
Chapter 8 Customer acquisition: sales and pricing:
r theory and examples have been updated
r more attention has been given to marketplaces
r concepts such as mobile commerce, personal pricing and social log-in
have been added
r questions have been supplemented and updated
Chapter 9 Order processing:
r theory, examples, questions and case have been updated
r concepts such as seamless customer experience, social care and
wallets have been added
Chapter 10 Customer Relationship Management:
r structure has been changed
r theory, examples and questions have been updated
r concepts such as usage data and collaborative experiences have been
added
r new case study
Chapter 11 Designing effective websites and apps:
r section about effective apps has been added
r theory and examples have been updated
r concepts such as cultural probing, Google Actions, hallway test, HEART
framework, persuasive design, shadowing and task completion rate have
been added
r questions have been updated and supplemented
r new case study
Chapter 12 Digital analytics:
r theory, examples and questions have been updated
r concepts such as attribution model, connection ratio, event, intelligent
tracking prevention and property have been added
r new case study
Chapter 13 Planning and organisation:
r section about security measures for the prevention of cyber crime has
been added
r theory, examples, questions and case have been updated
r concepts such as cryptoware, DDoS attacks, defacing, Design Thinking,
product backlog, ransomware, scrum and sprint have been added
© Noordhoff Uitgevers bv
Contents
1
Digital Marketing
1.1
1.2
1.3
1.4
1.5
1.6
1.7
Definition of Digital Marketing 14
Digital Marketing versus traditional marketing 15
Digital Marketing and the Marketing Mix 17
Digital Marketing in relation to business processes 18
Development of Digital Marketing 20
Two important models for Digital Marketing communication 21
The outline of this book 24
Questions and assignments 26
Case: Digital Marketing at Marriott 26
2
Strategy and Business Models
2.1
2.2
2.3
2.4
Digital Marketing and Strategy 32
Marketing Strategy 34
The business model 37
Determining the impact of new internet technology on Digital Marketing 57
Questions and assignments 62
Case: Cleartrip 63
3
Market Sensing 69
3.1
3.2
3.3
3.4
3.5
3.6
3.7
Internet usage 70
Online shopping behaviour 73
Online buying process and the Digital Marketing funnel 76
Use of social media 89
Online Market Research 94
Big data and customer insights 107
Relevant trends in Digital Marketing 115
Questions and assignments 126
Case: How Alibaba benefits from Singles Day 127
4
Product Realisation 131
4.1
4.2
4.3
The aim of the product realisation process is customer value 132
Co-creation 135
Product development, mass collaboration and crowdsourcing 137
13
31
© Noordhoff Uitgevers bv
4.4
4.5
Developing and setting up online products 142
Product improvement 159
Questions and assignments 165
Case: Hire your neighbour’s car with SnappCar 166
5
Customer acquisition: digital brand communications
5.1
5.2
Digital Marketing communication: the basis 172
Role of Digital Marketing communications in brand
management 184
Role of social media in digital brand communications 189
Content marketing 200
Mobile communications 208
Questions and assignments 216
Case: Digital Brand communications at Patagonia 217
5.3
5.4
5.5
171
6
Customer acquisition: recruiting visitors through owned or
earned channels 223
6.1
Using digital communications and sales channels to reach and win
customers 224
Search Engine Marketing 226
Link-building 232
Use of social media channels 243
Email marketing 254
Marketing automation 266
Questions and assignments 272
Case: Samsung UK targets SMEs 272
6.2
6.3
6.4
6.5
6.6
7
Customer acquisition: recruiting visitors through
paid channels 277
7.1
7.2
7.3
7.4
7.5
7.6
Digital Marketing communication through paid channels 278
Paid Search (Pay-Per-Click = PPC) 279
Online display advertising 295
Advertising on social networks 314
Affiliate marketing 320
Using online games for advertising 337
Questions and assignments 340
Case: Under Armour ecommerce (Google Shopping) 341
8
Customer acquisition: sales and pricing
8.1
8.2
8.3
8.4
Selecting digital sales channels 348
Online sales via ecommerce sites and apps 351
Online sales advice 365
Online price setting 370
Questions and assignments 384
Case: ASOS 385
347
© Noordhoff Uitgevers bv
9
Order processing 389
9.1
9.2
9.3
9.4
Selection of distribution channels 390
Payments 395
Sub-processes of order processing 407
Online service 411
Questions and assignments 420
Case: IKEA focuses on customer experience and self-service
420
10
Customer relationship management
10.1
10.2
10.3
10.4
10.5
10.6
Digital customer relationship management 428
Working with customer groups 439
Encouraging customer satisfaction and loyalty 444
Increasing customer value 451
Individual value propositions 456
Social CRM 461
Questions and assignments 467
Case: Fashion brand Diane von Furstenberg makes customers feel special 467
11
Designing effective websites and apps
11.1
11.2
11.3
11.4
11.5
11.6
11.7
11.8
Effectiveness of websites and apps 474
Influencing the visitor 478
Website usability 484
Web content and web text 489
Interaction and conversion 497
Effective landing pages 502
Search Engine Optimisation (SEO) 505
The development of an effective app 513
Questions and assignments 520
Case: An International Marketing Award for the Anne Frank Foundation
427
473
521
12
Digital analytics
12.1
12.2
12.3
12.4
12.5
12.6
12.7
Digital analytics: definition and starting points 526
The Digital Marketing funnel translated into performance indicators 528
Different traffic sources within digital analytics 537
The ABC Model: the Digital Marketing funnel 548
Recognising the phase that the visitor is in 551
Social media metrics 553
Digital analytics in the organisation 556
Questions and assignments 559
Case: Digital Analytics in practice at Van der Valk Hotels 560
525
© Noordhoff Uitgevers bv
13
Planning and organisation
13.1
13.2
13.3
13.4
13.5
Organising Digital Marketing activities 566
Digital Marketing plan 577
Project management 590
Security measures against cybercrime 603
Legal aspects of Digital Marketing 605
Questions and assignments 617
Case: Online food delivery service Deliveroo 618
References 622
Illustrations 632
Index 634
About the authors 645
565
12
2
Strategy and Business
Models
10
Customer
relationship
management
13
Planning and
organisation
9
Order
processing
8
Customer
acquisition:
sales and
pricing
3
Market
Sensing
1
Digital Marketing
7
Customer
acquisition:
paid channels
12
Digital analytics
4
Product
Realisation
5
Customer
acquisition:
digital brand
communications
6
Customer
acquisition:
owned or
earned
channels
11
Effective
websites
and apps
© Noordhoff Uitgevers bv
1
Digital Marketing
Author: Marjolein Visser
Over the past decades the framework of marketing has changed
dramatically. Internet use has become part of the daily routine for almost
everyone. It has radically transformed the behaviour of consumers and
business buyers. Knowledge of online consumer behaviour and Digital
Marketing are vital to marketers. This first chapter will explain what Digital
Marketing involves and which basic principles are covered in this book. The
following chapters will describe how Digital Marketing fits within all of the
other marketing related business processes. The last chapters of this book
describe overarching subjects eg. effective websites and apps, digital/web
analytics and the planning and organisation of the Digital Marketing
process.
This chapter will cover:
r the definition of Digital Marketing
r Digital Marketing versus traditional marketing
r Digital Marketing and the marketing mix
r Digital Marketing in relation to business processes
r development of Digital Marketing
r basic models for Digital Marketing communication
After reading this chapter you will be able to:
r explain what Digital Marketing involves
r identify the differences between traditional marketing and Digital
Marketing
r name and recognise ‘the seven types of websites’
r denote the relationship between the Four Ps and the Four Cs
r describe the five Digital Marketing-related core business processes
r describe the phases in the development of Digital Marketing
r using examples, illustrate how the Digital Marketing funnel is related to
the RAIA model
13
1
© Noordhoff Uitgevers bv
14
§ 1.1
Definition of Digital Marketing
Kotler and Armstrong (2019) define marketing as follows: “Marketing is the
process by which companies create value for customers and build strong
customer relationships in order to capture value from customers in return.”
Peter Drucker (1973), a famous management guru, defined the purpose of
marketing as follows: “the aim of marketing is to know and understand the
customer so well that the product or service fits him and sells itself.”
1
According to Kotler, marketing is an integrated process that companies use
to create value for customers and to build strong customer relationships in
return for a reciprocation of value from their customers. In many instances,
products or services are traded for money, but alternative exchanges are
also possible, eg. political parties that trade ideological representation of
interests for votes or brands that trade interesting/valuable content for the
user’s time and attention.
The internet plays an ever-increasing role within the marketing process.
Digital Marketing is a sub-process of marketing. Therefore, we can define
Digital Marketing as a process in which organisations and existing or
potential customers use the internet to create value and products as well
as exchange them. In this respect we do not discriminate between the
various ways that the internet is accessed and the device on which the
content on the internet is viewed. Whether a computer or a smartphone is
used is of importance to the applied technological methods, but not to the
marketing principles. Internet marketing, online marketing and e-marketing
are all synonyms for Digital Marketing. In this book, we will use ‘Digital
Marketing’.
Ecommerce
Ebusiness
One frequently asked question remains: what is the difference between
Digital Marketing, ecommerce and ebusiness? Ecommerce refers to selling
products or services over the internet. Customers can complete
transactions or submit changes using a website. This book considers
ecommerce to be one of the possible options within Digital Marketing. Many
organisations do approach their customers via the internet, but don’t sell
their products online. In this case it is a question of Digital Marketing
communication, an element of Digital Marketing, but not of ecommerce.
The authors of this book see ebusiness as a way of doing business with the
assistance of digital technologies. Ebusiness is a wider concept than Digital
Marketing and ecommerce. In ebusiness it’s not only about the interaction
with markets, but about adequately establishing all of the processes that
enable an organisation to make their products or provide their services. It’s
about the front and the back of the organisation, including the parts the
customer does not come into contact with (see Figure 1.1). Ecommerce is
simply defined as ‘selling and buying online’.
© Noordhoff Uitgevers bv
DIGITAL MARKETING
15
Ebusiness encompasses digital processes throughout the entire
organisation and is more inclusive than Digital Marketing
FIGURE 1.1
Ebusiness
1
Digital
Marketing
Market
§ 1.2
Digital Marketing versus traditional marketing
Digital Marketing is becoming increasingly important.
As a result of the growing number of possibilities regarding digitalisation
and interactivity that the internet facilitates, a number of marketers’ dreams
have become reality. When used wisely, the internet makes marketing more
effective: marketing objectives can be met with less effort. Consider the
following possibilities:
r Thanks to the internet, the customer’s demands for information are more
easily and simply met.
r The internet allows for the provision of tailor-made information.
r The internet offers the possibility of gathering large quantities of data
about potential customers.
r The effects of marketing communications on the internet can (in most
cases) be easily measured.
r A high level of interactivity with customers is possible.
Also, Digital Marketing can be more efficient than traditional marketing. Eg.:
r It is possible to share large quantities of information with potential
customers at low cost.
r The marketing budget can be more purposefully assigned due to the fact
that the effects of marketing communications are (in general) more
easily measurable.
The internet has accelerated the transition from mass marketing to individual
marketing. The aim of individual marketing is to fully tailor products and
marketing or marketing efforts to the individual customer.
Because the internet allows for the customer’s individual data to be saved,
communications have become increasingly ‘personalised’. The profile of the
individual customer is recognised; thus, they receive a ‘personalised offer’,
an individual proposition. That way a travel agency can offer a customer, who
is recognised in their database as someone who likes to take his/her
children to a theme park, a last-minute deal for Disneyland Paris.
One-to-one
marketing
Individual
marketing
Individual
proposition
16
Individualised
production
1
Corporate sites
Ecommerce sites
Selling sites
Communication
sites
Lead generation
sites
Branding sites
Service sites
Portals
Content sites
© Noordhoff Uitgevers bv
Simultaneously, an older couple that enjoys walking are offered a peaceful
holiday in the Austrian Alps.
The internet makes individualised production easier. On the internet, you
can design T-shirts or greetings cards with a personalised image on them,
You can even design your own brooch and have it printed in 3D. Digitised
services mean users can seek advice or information at any time: even in
the middle of the night you can ask your bank for a statement or pay a bill;
the internet and world wide web (www) are ‘always-on’ 24/7. Individualised
distribution of ordered goods or services is relatively cheap and often highly
effective via the internet. Eg. when you book a flight online, you can either
print your ticket yourself or access it on your smartphone via the airline’s
own app. A package from Amazon.com is delivered to your doorstep the
following day; you don’t have to go to the store for it; moreover, you get
helpful messages regarding the status of your order.
The website is at the centre of Digital Marketing. Websites can be classified
as follows:
r Corporate sites are aimed at supporting interaction between the
organisation and the various stakeholders, eg. customers, employees,
press and shareholders.
r Ecommerce sites are online stores or selling sites where products can
be viewed and ordered; famous examples are Amazon.com, eBay and
Taobao (Alibaba). Ecommerce sites can also be procurement sites of a
company or sector, where the purpose is seeking/accepting offers/bids/
tenders, ie. buying, not selling.
r Communication sites inform their visitors more about the products or
services of the supplier. Besides product descriptions these sites also
include functional elements eg. lists of stores where the product can be
purchased (or ‘store finder’ tools) and user manuals. An example of this
type of site is Grundig.com. In some cases (especially for Business-toBusiness ie. B2B marketing) this type of website has the specific
purpose of reaching out to potential customers. These are called lead
generation sites.
r Branding sites aim to improve brand knowledge and brand perception.
These sites are usually very interactive and contain ‘fun’ recreational
elements eg. forums or games intended to make the visitor come back
more often. Eg. Liverpoolfc.com.
r Service sites not only provide information but are also involved in the
production process of the organisation. Eg.; online banking, ebay.co.uk
and online newspapers. In these cases, the content and functionality are
the product.
r Portals present an overview of websites for specific target groups or for
particular subjects. In web history, brands like AOL, Yahoo! and msn were
early examples.
r Content sites or publishing sites provide their visitors with information.
This could be news, but also other kinds of information that would be
interesting for a specific target group or in a specific situation, eg.
reviews. Examples are websites eg. huffingtonpost.com or tripadvisor.
com.
Apps can also take on the aforementioned roles within the Digital
Marketing strategy.
© Noordhoff Uitgevers bv
DIGITAL MARKETING
17
1
The Liverpool FC brand website is interactive and contains relaxing elements
In referencing PR Smith’s 5Ss model, Chaffey & Ellis-Chadwick (2019) list
five objectives for Digital Marketing communications activity:
r Sell; increasing sales by accessing new markets or by developing new
(online) products.
r Speak; initiatives for better communications with (potential) customers.
r Serve; improving customer service.
r Save; cost reduction through the use of digital media.
r Sizzle; initiatives to support the brand.
§ 1.3
5Ss model
Digital Marketing and the Marketing Mix
The ‘Marketing Mix’ is one of the most frequently used concepts from
marketing theory. Originally it represents a sort of formula for marketing
activities. The idea is that the marketer should be a kind of chef, mixing the
four elements together in order to achieve an offer that caters optimally to
the taste of the target audience; a product that aligns with their needs and
desires, a price they are willing to pay for that product, a place where they
can buy or reserve the product and promotion to stimulate the sales of the
product. Another analogy is that of the marketer as the ‘conductor of the
orchestra’, bringing in each instrument at the appropriate time and at the
appropriate volume. Later, the Marketing Mix’s element ‘place’ gained a
broader definition. It’s not only about the question of where the customer
can buy the product (distribution), but also about the answer to the question
of how the product will eventually end up in the customer’s hands.
Today, almost every organisation uses the internet for customer
communications. This could simply be a way of providing information
(replacing traditional brochures), but also advertising (eg. online display
advertising) or sales. The internet can contribute towards each of the
marketing instruments: product, place, price and promotion (the Four Ps).
Examples of websites as a product are auction sites (eg. eBay) and dating
sites (eg. Tinder, Grindr). Websites as distribution channels (place) are those
of eg. music publishers or publishers of scientific publications. After payment
you can download or stream the desired song or article. Airlines are a good
example of how the internet can be deployed as part of the marketing
instrument ‘price’ (see dynamic pricing).
Marketing Mix
Four Ps
© Noordhoff Uitgevers bv
18
It is interesting how the different marketing instruments seem to merge
on the internet and particularly in the case of information-based
service businesses and publishers. Banks are a clear example of this:
online banking is undeniably part of the production process, but it also
replaces the physical bank branch as a distribution channel.
Simultaneously the website functions as promotional channel for the
various financial products that the bank wants to bring to the attention of
their customers.
1
Four Cs model
The Four Ps are often denounced as not being viewed from the purchaser’s
perspective. For this reason, Robert Lauterborn introduced the Four Cs
model. He states that marketing has developed from a technique for
organisations to sell a product (P) into a philosophy to endear themselves to
their customers and encourage commitment. The old Ps are predominantly
suitable for a manufacturer, the modern Cs are a better fit for a more
customer-orientated organisation that views itself through the eyes of their
customers (Lauterborn, 1990).
Therefore, Lauterborn transforms the Four Ps model into the Four Cs model
(see Table 1.1).
TABLE 1.1
SIVA-model
§ 1.4
Market sensing
process
Product
realisation
process
Customer
acquisition
process
From Four Ps model to Four Cs model
Four Ps
Four Cs
Product
Price
Place
Promotion
Customer solution: solving the consumer’s problem
Cost to the customer: price/quality ratio
Convenience: accommodating the customer
Communication: reciprocal communication between an organisation and
its customers
Dev and Schultz followed up on this model by translating it into the SIVA
model Solution, Information, Value, Access (Dev & Schultz, 2005). Both the
Four Cs and the SIVA model fit in with the interactivity and customer focus
that characterises Internet marketing, but they turned out to be less suitable
for the structure of this book. After weighing the pros and cons of each of
the established models, the format that was chosen was one that matches
the core processes related to marketing as described in Philip Kotler’s recent
books. This way the relationship to general marketing theory is retained.
Digital Marketing in relation to business
processes
The five core processes of a business’s marketing are (Kotler & Keller, 2016):
1 The market sensing process: the process that keeps organisations up to
date with the market’s needs, developments and trends.
2 The product realisation process: researching and developing new core
products and services, extending the market supply and the launch of
the product.
3 The customer acquisition process: defining target markets and acquiring
new customers.
© Noordhoff Uitgevers bv
DIGITAL MARKETING
4 The order fulfilment process: receiving and approving orders, shipping the
ordered goods on time and collecting payments. (literally: delivering on
your promises).
5 The customer relationship management process (CRM): building a
deeper understanding, a better relationship and a better offer for
individual customers.
19
Order fulfilment
process
Customer
relationship
management
Among other things, online market sensing consists of actively following and
analysing the behaviour of your own website visitors, gathering information
from social media and online market research (see Chapter 3). One of
online market research’s biggest advantages is that results can be quickly
collected and immediately accessed.
With the realisation of a new product (Chapter 4), concepts eg. ‘user
generated content’ (UGC) and crowdsourcing come into play. Users lay the
foundation for new products and product improvements by reviewing
products and answering the questions of other users. Crowdsourcing
organisations actively encourage the internet community to get involved and
come up with new ideas for products. Market sensing and digital/web
analytics (Chapter 12) play a big part in forecasting how successful new
products will be. Immediate feedback from users leads to a more rapid
process of quality improvement and product innovation.
User generated
content (UGC)
Digital Marketing communications (Chapters 5 to 8) provides a way of
generating new customers. Online sales and pricing are important aspects
for this. One great advantage that the internet provides is that the results
can generally be easily measured, which allows quick changes to be made if
necessary. So the organisation can also calculate exactly what the most
and least profitable communications activities are.
Digital
Marketing
communication
Order processing is done quickly and efficiently when the website is
combined with an effective and efficient payment and distribution system
(see Chapter 9). The advantage of using the internet is that there is minimal
time between order, payment and approval of the order (‘real-time’
transactions). The payment process is therefore more efficient and
customer-friendly than in the ‘offline’ world. If the product too is digital, the
whole process is even more effective: it can be delivered to the customer
immediately after payment: the organisation sends a confirmation email or
gives the customer access to a download on a website.
Customer relationship management or CRM (Chapter 10) uses a variety of
channels eg. social media, newsletters, web personalisation and email. In
this way, organisations stimulate customer loyalty, allowing them to provide
a more personalised service, to make individual offers and to generate
higher earnings from existing customers. The main focus is to build
customer loyalty. Because data from these customers can be directly
included in the database, the results of these efforts are easily measurable,
and the time needed to act on customers’ activities can be minimised.
Market sensing does not only occur when a product is brought to market, but
during all business processes. Using digital/web analytics, valuable
information about the target market’s behaviour is gathered permanently.
Based on that information, the processes are being optimised and
Crowdsourcing
Digital/web
analytics
1
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20
improvements are made to the range of products/services on offer to the
customer. Digital Marketing is a continuous cycle (see Figure 1.2).
FIGURE 1.2
Digital Marketing is a continuous cycle
1
Market
sensing
Customer
relationship
management
Product
realisation
Digital
Marketing
Customer
acquisition
Order
processing
§ 1.5
Development of Digital Marketing
In recent years Digital Marketing has advanced rapidly. We can divide this
development into three broad phases: the mass media phase, the internet
phase and the social media phase. Figure 1.3 displays the development of
marketing, brands and the role of the various types of media. In short,
Figure 1.3 explains that brands and consumers are growing closer together.
FIGURE 1.3
B
The development of marketing, brands and media
Brands
Paid
media
1.0
Media
B
Owned
media
2.0
3.0
Paid
media
C
C
Consumers
Source: Marco Derksen/Upstream, edited by DVJ Insights, 2011
Earned
media
B
C
Paid
media
Earned
media
Owned
media
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DIGITAL MARKETING
In Figure 1.3 you also see the concepts: paid (= bought), owned and earned
media. These are collective concepts for types of media:
1 Paid media: these are types of media that marketers can buy to create
brand awareness (consider online advertising, radio, television and print).
2 Owned media: these are types of media that are readily available to
marketers themselves and in which they can autonomously decide on the
content (eg. websites, apps, email newsletters etc.).
3 Earned media: these are all types of media that a brand ‘earns’ thanks
to customers or journalists, or bloggers/influencers writing about your
brand, eg. on social media, or because other organisations refer to your
brand on their website.
During the first period (the mass media phase) the gap between ‘brands’
and consumers was the largest; it was mainly the marketer who sent out
messages to the consumer, who received them. This is also called ‘push’.
In the second marketing phase (the internet phase) there was more
interactivity between marketers and consumers and a dialogue started
between them.
In the last (most recent, current) phase, the social media phase, it goes
without saying that consumers are now influencing the brand and therefore
are an indispensable part of the process. Not only is there dialogue, but
also a reciprocal influence. In this case there is no ‘push’ anymore, but
‘pull’. The consumer has a say in what the brand entails and the marketer
observes the consumer’s perception of the brand and is supportive of this.
(You can read more about this in Chapter 4.)
§ 1.6
21
Paid media
Owned media
Earned media
Mass media
phase
Push
Internet phase
Social media
phase
Pull
Two important models for Digital Marketing
communication
As described in 1.1, the ultimate aim of marketing is the exchange of
products and value. A company like ASOS aims to exchange a product for
money, an organisation like the US Democratic party aims to represent the
interests of specific groups in society in exchange for votes. Regardless of
the presence of a commercial objective, the ultimate goal of Digital
Marketing communication is always to encourage the target audience to
engage in a specific action. This is called a conversion. For a commercial
organisation, this conversion takes place in the digital sales channel,
eg. a website or an app. We will further explain two basic models using an
ecommerce retailer as an example. First, the Digital Marketing funnel,
then the RAIA funnel.
The first point of attention for a digital marketer is generating visits to the
digital sales channel, in this case the ecommerce website (visit). Here, the
objective is to ensure that visitors are so interested in what they find, that
they want to find out more about what is on offer (captivate). The next step
is ensuring that the visitors compare and evaluate products in order to come
to the decision of what to buy (decide). Then the visitor orders the chosen
product (order) and completes the payment procedure (payment), leading to
the realisation of actual sales. The last objective is to bind the buyer to the
ecommerce website in order to encourage repeat purchases (bind). This is
clearly shown in the Digital Marketing funnel (Figure 1.4). This funnel is used
Conversion
Digital
Marketing funnel
1
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22
in order to ensure that the digital sales channel or communication channel,
where the final conversion must take place, is structured as effectively as
possible. More on this subject can be found in Section 3.3.
1
FIGURE 1.4
The Digital Marketing funnel
Visit
Captivate
Decide
Order
Pay
Bind
Activation
RAIA model
Hard conversion
Soft conversion
People tend not to find an online retailer by chance; rather the digital
marketer must first reach out and convince them. This can be done by
constructing a carefully-planned mix of paid, earned and owned media,
supplemented with offline communication. Offline media are not covered in
this book. The target audience can be reached by, eg. posting a video on
social media (Reach). Once someone has seen the message, they must
give it their full attention and become aware of the website’s existence
(Attention). Eg. someone is watching the first part of the video. It must
attract their interest (Interest). If this person watches the video until the
end, the digital marketeer knows this has succeeded. Subsequently, the
potential customer must be motivated to visit the website (Activation).
Activation means encouraging those who have been reached online, to
follow through with the digital marketer’s required action. This is illustrated
in the RAIA model (Figure 1.5). Just as in the Digital Marketing funnel, this
is a funnel through which the digital marketer attempts to guide people,
using a step-by-step approach. More about this can be found in Section 5.1.
Conversion is a general term used to describe the group of people who have
been reached by Digital Marketing communication and who have exhibited
the desired behaviour (ie. ‘converted’). Any successful activation is a
conversion, which can lead to some confusion. This is why the ultimate aim
of Digital Marketing, eg. an online sale, is called a hard conversion. An
intermediate step, eg. clicking on an ad or visiting the website, is called a
soft conversion. Often, several soft conversions are necessary in order to
achieve a hard conversion: someone reads a social media message,
watches a corresponding video, then searches for more information using a
search engine and clicks on a link in an article, leading them to the website,
where they eventually buy something.
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DIGITAL MARKETING
The RAIA model
FIGURE 1.5
Reach
1
Attention
Interest
Activation
In summary: the digital marketer uses the RAIA model to encourage
members of the target audience to visit the digital sales channel (eg. the
website or app) using a clever mix of paid, owned and earned media. Next,
the realisation of a sale or another form of hard conversion (eg. a
subscription, vote or donation) is attempted. Then, by binding them to the
organisation, customers are encouraged to remain loyal. This is illustrated
in Figure 1.6. Loyalty is expressed in repeat visits, but also in online wordof-mouth. In this way, a relationship is established with the customers,
further insight into their behaviour is gained and communication can
become more personal and effective.
From the RAIA model to the Digital Marketing funnel
FIGURE 1.6
Reach
Digital
communication
channel
Attention
Owned media
Activation
Interest
Paid
media
23
Earned
media
Visit
Captivate
Digital
sales channel
Decide
Order
Pay
Bind
Encourage
loyalty
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24
§ 1.7
1
The outline of this book
Chapter 2 covers the strategic aspects of Digital Marketing. The main focus
in this chapter will be on determining the relationship between the business
model and the online activities.
Chapter 3 discusses the market sensing process, online consumer
behaviour, the use of the internet in marketing and online market research.
In Chapter 4 you can read how Digital Marketing translates itself into the
‘product realisation’ process.
Chapter 5 covers the first part of the customer acquisition process; online
brand communications.
Chapter 6 covers customer acquisition through owned and earned channels.
In Chapter 7 we will describe the customer acquisition process through paid
channels, or in other words: online advertising (display and paid search).
Chapter 8 focuses on online sales and pricing.
In Chapter 9 you can read which aspects play a part in the ordering process
resulting from online sales of products and services.
Chapter 10 deals with the customer relationship management (CRM) process.
By this point in the book, all of Kotler’s core processes will have been
reviewed. Chapters 11, 12 and 13 deal with umbrella topics: designing and
building effective websites, digital analytics, planning and finally resourcing
Digital Marketing within the organisation.
In recent years, the confidence that web users have in the integrity of
organisations who sell over the internet has been damaged on a number of
occasions. Examples are privacy violations, the selling of data to third
parties and negligent security. For this reason, Chapter 13 will elaborate on
the ethical aspects of Digital Marketing in greater detail.
Figure 1.7 concisely displays the outline of the chapters.
© Noordhoff Uitgevers bv
FIGURE 1.7
DIGITAL MARKETING
25
The outline of this book
2
Strategy and Business
Models
10
Customer
relationship
management
13
Planning and
organisation
9
Order
processing
8
Customer
acquisition:
sales and
pricing
3
Market
Sensing
1
Digital Marketing
7
Customer
acquisition:
paid channels
1
4
Product
Realisation
5
Customer
acquisition:
digital brand
communications
11
Effective
websites
and apps
6
Customer
acquisition:
owned or
earned
channels
12
Digital analytics
This book is structured in the same order that many organisations use to
make their marketing decisions. If you are not particularly familiar with
marketing and management issues you may choose to read Chapters
3 to 10 first, before tackling Chapter 2. That way you will get a better
understanding of the exact contents of the business model and its specific
elements and, crucially, why the selection of a business model is so
important for every organisation.
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26
Questions and assignments
1
NOW CHECK YOUR UNDERSTANDING:
1.1
a
b
c
d
1.2
Compare the way that amazon.com sells books to how a bricks-and-mortar
bookstore like Barnes & Noble does this.
What are the comparisons and differences in the way books are being sold?
Describe your idea of how each of the five marketing related processes (see
Figure 1.2) progress for amazon.com and for Barnes & Noble, the bookseller.
How would you characterise both organisations: as a Digital Marketing
organisation, as a traditional marketing organisation or as a mixture of both?
Support your answer with evidence.
Digital Marketing has developed in three phases. To what extent have both
organisations adapted to the most recent phase? Support your answer with
examples.
a In Section 1.2, seven types of websites are discussed.
For each of the following websites, specify which category it belongs to:
www.unilever.com
www.staples.com
www.independent.co.uk
web.wechat.com
www.apple.com
www.citymapper.com
www.airbnb.com
b Pick one of the above suppliers and construct the Marketing Mix using the
Four Ps and the Four Cs. What do you notice?
c Using the Digital Marketing funnel and the RAIA model, create a coherent
system of Digital Marketing objectives for the office supplies retailer,
Staples.com. You may rely on assumptions but try to find some realistic
conversion percentages online.
1.3
CASE
Digital Marketing at Marriott
By Marjolein Visser
Marriott International, the parent organisation of, amongst others, the
Marriott and Ritz Carlton hotels, tries to make use of as much modern
technology as possible in order to meet the needs of the young,
contemporary business traveller, so-called Millennials. Using the Marriott
Bonvoy app, guests participating in the loyalty programme are able to book a
© Noordhoff Uitgevers bv
DIGITAL MARKETING
hotel, check in on their mobile device, request services and extras, and chat
with Marriott employees before, during, and after their stay. The app uses
chatbots for simple questions, allowing guests to receive an immediate
response. On the day before their arrival at the hotel, guests receive a push
notification on their smartphone, informing them that they can check in. They
will then receive an automatic notification when their room is ready for them.
This prior communication means that the hotel is prepared for their arrival.
Since payment information is stored in the guest profiles, guests are given a
virtual key via the app or, upon entering the hotel, they may visit a dedicated
check-in counter where a pre-programmed key card is already waiting for
them. At the end of their stay, guests receive another push notification
alerting them to the availability of a mobile checkout option. Should they so
choose, guests are asked to provide an email address to which their invoice
can be sent, meaning they no longer have to call at the Hotel Reception.
Within the hotel itself the many possibilities that mobile communication has
to offer are also employed. Marriott app users can request the most
commonly used services from a drop-down menu, such as the provision of
extra towels, pillows or breakfast in bed. With increasing frequency, hotel
rooms are also being equipped with a digital assistant which connects guests
with the Reception, allowing them to request room service, for example.
Stephanie Linnartz, Group President, Consumer Operations, Technology &
Emerging Businesses, commented at the Skift Tech Forum: “To remain the
market leader, we are constantly improving and expanding our offer through
direct channels. We offer our loyal customers benefits when they book
directly, such as free wi-fi, member rates and mobile check-in/out, mobile
keys as well as other benefits. Our new and improved booking solution
makes it possible for customers to ‘customise’ their stay. They can choose
rooms with specific features, including ones they are willing to pay extra for
and be assured of. Our customers enjoy knowing what their options are and
being in control of them”.
“Marriott combines ‘high tech’ with ‘high touch’ to offer guests a seamless
and personalised experience. We use technology that enables our members
to have an ongoing “conversation” with us, regardless of which channel or
device they are using, whether they are staying in one of our
accommodations, or communicating through our call centre agents, our app
or whilst searching for something on Marriott.com”.
The M Live social media monitoring hub also plays an important role in
providing a seamless customer experience. Messages that hotel guests
send via social media are analysed from social hubs in the United States,
Europe and Asia. When someone is staying in a Marriott hotel, this is
identified from the geolocation that is linked to the messages.
“Let’s say you’re staying in a Ritz Carlton hotel somewhere in the world and
you’ve posted a photo on Instagram to let everyone know that you’ve
become engaged”, said Scott Weisenthal, Vice President, Global Creative
and Content Marketing, in an interview on inc.com, “a second later this
comes up in our M Live Command Centre... we will then call the hotel and
the hotel will send up a bottle of champagne”.
27
1
© Noordhoff Uitgevers bv
28
By monitoring what guests share, Marriot can deploy personalised
marketing communications and surprise customers, leading them to
become loyal customers and begin spreading positive messages about
the brand. Of course, this needs to be done both sensitively and legally to
give every guest a personal and valuable experience at every point on
their customer journey.
1
The Marriot app even allows you to unlock the door to your room
Sources: hotelbusinessweekly.com, inc.com, skift.com and mobile-appmarriot.com
NOW CHECK YOUR UNDERSTANDING:
a There are seven different categories of websites. To which category does
the website Marriott.com belong?
b Make an inventory of how Marriott International uses mobile
communications for Digital Marketing. To help you with this, take a look at
https://mobileapp.marriott.com/ (N.B. This works on a tablet, laptop or
desktop with Windows 10)
c Section 1.2 explains how Digital Marketing can be more effective and
efficient. Which of the seven advantages mentioned would also apply to
mobile marketing as used by Marriott? Show evidence for each applicable
advantage.
d As part of which of the Four Cs does Marriott use mobile marketing?
e Within which of the five marketing-related processes does Marriott use
mobile marketing? Give an example for each core process.
f The M Live social media monitoring hub plays an important role in providing
a seamless customer experience. Find at least three other examples that
demonstrate how Marriott has adapted well to the socially-connected world.
g Devise a social media campaign for a Marriott hotel. Use the RAIA model
and the Digital Marketing funnel to illustrate how this campaign can drive
online hotel bookings via the Marriott website.
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